Archive for the ‘Pak Loan Write-off’ Category
Suggestions to recover Pakistani wealth stashed abroad..!
October 9th, 2018 | 
Author: Subject:-Suggestions to recover Pakistani wealth stashed abroad
Dear Mr. Imran Khan Sahab.
AoA.
Sir,
This in continuation of our trailing emails of 29 August 2018 on the subject mentioned above.
We can bring savings of expatriate Pakistanis back to provide them dollar denominated saving instruments; perhaps bearer in nature, or no questions asked.
Say our current euro bonds are junk rated and trading at a discount rate of 8% or more, but not accessible to local populace or retail customers abroad; mostly institutional.
Just give a local bond at 5% to any and everyone interested, which is far more than any such rates in the world, hence, you glean in pakistani money from our diaspora, as well as, locals.
The caveat is no questioned asked to the source of money.
Best Regards,
Hamesh Khan S. Nayyar Uddin
Dated 29 August 2018
Dear Mr. Imran Khan,
AoA.
Sir,
Please refer to our trailing email dated 29 August 2018 on the subject mentioned above.
In this connection, Mr. Hamesh Khan and myself would like to further add the following:
The main difference between our proposed amnesty scheme and the recently floated amnesty scheme which expired on 31 July 2018 (wherein it was not mandatory to bring the foreign Pakistani wealth into Pakistan) is that we have proposed that any relief of whitening the Pakistani wealth stashed abroad, with payment of tax equal to the 2 to 10% of the total amount, will only be permitted, if, that total amount is transferred back to Pakistan.
The bigger impact of our proposed amnesty scheme relates to physical repatriation of funds stashed abroad to Pakistan, which will reflect as investment into the economy.
Tax regime of 2 to 10% will be a pittance compared with physical fusion of money.
In many a recessionary time, pumping money by the central bank is the panacea of all economic woes.
Investment and resultant Productivity invariably spurs Economic Growth.
Investment is a central factor in determining the gross domestic product, which is the aggregate measure of a country’s economic output.
As societies invest more, they increase their capacity to produce more goods and services at lower costs, meaning greater productivity and economic growth.
Investment, in short, drives increases in productivity and growth.
Economists define investment as spending on inventories, structures and capital, defined as equipment used for producing goods and services.
Investment fuels rises in productivity.
Because investment is a component of GDP, increasing investment can fuel economic growth as measured by annual increases in GDP.
Investment and economic growth rate data for various countries over a period of time, gives a very good insight on economic growth.
Countries with higher rates of investment, such as Japan, South Korea and Singapore, had the highest economic growth rates for extended periods on account of higher investments. These indicate a positive correlation between investment and economic growth.
Hence bringing back money tantamount to savings that gets infused into economy for larger growth.
Best Regards,
Syed Nayyar Uddin Ahmad
03219402157
Lahore.
Sent from my iPhone 7
On 29-Aug-2018, at 12:13 AM, Syed Nayyar Uddin Ahmad
Dear Mr. Imran Khan,
AoA.
Sir,
This has reference to the following titled news item published by the daily “Express Tribune” of 28 August 2018.
PM seeks suggestions to recover wealth stashed abroad:
Link:-https://tribune.com.pk/story/1789207/1-pm-seeks-suggestions-recover-wealth-stashed-abroad/
The above news item explains the following challenges which may be faced by your Task Force:
– Review of all cases of unlawfully acquired assets pending before the government departments and organisations.
– Review the existing mechanism, international agreements, coordination of government of Pakistan with sovereign governments.
– Work out modalities to fast track recovery of undeclared offshore assets.
– Only legal way to get back the offshore assets was to use the Mutual Legal Assistance (MLA) framework.
– Pakistan has not signed legally binding MLA treaties with key jurisdictions like the United States, the United Kingdom, Canada, the United Arab Emirate and Malaysia.
– There was also lack of enabling domestic MLA law, which will become an obstacle in retrieval of assets.
– There is lack of robust interagency coordination.
– Another challenge that Pakistan will face is that it will have to establish that these were bona fide cases of recovery of assets and these were not politically motivated cases.
– Pakistan will also have to first lodge criminal cases against such individuals in local courts.
In view of the foregoing, there remains no doubt that the job of the Task Force set up to recover unlawfully acquired foreign assets is such that it will involve years of efforts to achieve any success.
As such, it is suggested that a plan B as detailed below, may be simultaneously launched to bring back foreign wealth of Pakistanis by an incentive scheme on the lines of the Indonesian model, which helped Indonesia bring back $366 billion.
In this regard, please note that under the last/latest offshore and domestic tax amnesty scheme, about 5,300 Pakistanis availed the offshore scheme and declared over $8 billion assets. But the repatriation to Pakistan remained less than $70 million.
The below mentioned suggestion is based for an estimated recovery of around 150 billion USD that too without involving any legal or administrative expenses spread over a large period of time.
PROPOSED SCHEME
Bringing back wealth has to be a collaborative process and will not yield results otherwise.
Indonesia which has a similar tax to GDP ratio as ours was able to repatriate US$366 billion through a voluntary amnesty scheme.
The main peg of the scheme was caveat of “no questions asked”.
It was a year long scheme with a varying tax rate of 2 to 10 percent.
Raising revenues through taxation is simply one aspect of revenue raising; the DECLARED MONEY VELOCITY is what spurs the economic expansion with sustainable results.
Policy makers can directly increase revenues by increasing tax rates on the rich, reducing tax breaks, expanding tax base, improving enforcement and levying new progressive tax.
Indirectly increase revenues through policies that increase economic activity, income and wealth.
One key overlooked aspect is fiscal responsibility through spending cuts, belt tightening on establishment cost across the board; but all of the aforementioned can only be achieved through a shared sacrifice psyche of the nation.
Among others, We need to work on savings and investments.
Policies that increase the number of people in work force, number of hours they work, skills, physical and intellectual capital.
Improving economy isn’t an insurmountable challenge, but the political will to push through, with less popular decisions, will test the leadership.
Co-authored by:
Hamesh Khan
Syed Nayyar Uddin Ahmad
Best Regards,
Syed Nayyar Uddin Ahmad
03219402157
Lahore.
Sent from my iPhone 7
A country where everyone pays tax..!
Mr. PM every Pakistani is paying tax
Dear Mr. Imran Khan,
AoA.
Sir,
It really hurts when our rulers, ministry of finance bureaucracy and few media persons say our people don’t pay taxes.
Even, in your speech on 20 August 2018 you said that only eight lac people pay taxes, which figure is obviously not correct, because even the number of tax filers are above one million. Yet, again in your senate speech of 27 August 2018 the media reports about you saying that we are also among countries that pay the least amount of tax.
However, the fact is that each and every item except AIR is taxed in Pakistan, which means that entire population of about 22 Crore pays tax in our country. Yes, certain VIP’s receive tax free salaries and also the Independent Power Producers (IPP’s) are allowed tax free income in Pakistan.
Just one example will explain my view point that there are over 12 Crore cell phone users in Pakistan; and each one of them pay tax while using the cell phone. The irony is that this WHT paid by the cell phone users in hundreds of billions of Rupees becomes the income of the TELCOS; as they seldom deposit this huge tax collection with the government.
Even today it was reported by the media that one Airline company has not paid to the government Rs.130 Crore tax it collected from the traveling public and CAA has suggested to put the name of its owners on the ECL.
Sir, since the With Holding Tax was imposed in Pakistan, it caused two way negative impact on the economy. Firstly, it enhanced the prices of almost every item in Pakistan and secondly, it opened huge vistas of corruption for the traders/businessmen/industrialists and bureaucracy in the country.
Now, it is said that our tax to GDP ratio is around 10-12 percent, which is the lowest in the region and the world, as well.
But the fact is that our black economy is bigger than our white economy, in which our people are paying WHT and bribes etc., which amount is almost double than the current tax collection of about Rs.4000 Crore or $40 billion. If someone wants proof of my this estimate, I will refer to the news item published on 17 April 2018 reporting that the Auditor General of Pakistan (AGP), Javaid Jahangir, has claimed that during the audit year 2017-18 auditors pointed out irregularities amounting to Rs8.276 trillion or about $80 billion in the accounts of the federal government. Link:- https://www.google.com.pk/amp/s/www.dawn.com/news/amp/1402111
If irregularities are almost double than the amount of our budget; the level of corruption or black economy can be easily estimated by even a lay man.
Now, the mother of all the financial corruption and taxation problems in Pakistan is the regime of taxation in which over 85% taxation is INDIRECT and less than 15% taxation is DIRECT, plus the scheme of WHT which can be called as one of the biggest source of corruption in the country. Here please note that corruption can not be made unless and until money is taken out of the pocket (in the name of taxes) of the public.
As such, kindly, instead of blaming the public for not paying the taxes, which in fact, even the dweller of Jhuggi is paying, the issues highlighted above of high indirect taxation, tax relief to the VIP’s and certain industries/businesses etc., and the MASSIVE misuse of WHT should be resolved in an intelligent and smart manner. May be the WHT should be withdrawn, altogether considering that world was a better place to live, before the advent of the WHT.
Best Regards,
Syed Nayyar Uddin Ahmad
Best and easiest way to build foreign exchange reserves..!
Fastest way to immediately fill the coffers of Pakistan with Foreign Exchange Reserves:
Immediate launching of a scheme for payment of 3% PA profit (payable bi-annually) on Foreign Currency bank deposits in Pakistan (backed by the sovereign guarantee of the GoP) with a suitable, but attractive fixed period, say five years.
This is a fool proof scheme, sans any risk, which can boost up our foreign reserves, in a very short time, on extremely cheap rates, as compared to the foreign loans with STRICT conditions where even it is reported that PMLN government obtained loans from China at 6% interest and in some cases 8% insurance charges= 14%) and international bonds, which were sold by the previous government of PMLN, at even 8.25% interest rates (Pakistan will be repaying USD 910 million for USD 500 million Euro Bonds) for which the then PM Mian Nawaz Sharif was requested to hold an inquiry, to fix the responsibility of the culprit(s), who allowed the sale of Euro Bonds, on such a criminally high interest rates.
How to combat economic terrorism within Pakistan?
We can compare the fluctuations in stock market rates with the currency rates in the forex market, the same way as a corporation’s stock reflects the public opinion of the corporation’s worth; the currency of a nation tends to reflect how the world market values the economic prospects and the future of a country in relation to other countries.
If a company (read country) is doing well, with increasing earnings and higher dividends to its stockholders, the stock of that company will tend to appreciate.
We Pakistanis must know, that without any doubt, the easiest and surest way of moving ahead, is to stand on our own feet.
Foreign aid/loans, can keep us afloat, but won’t allow us to swim. Actually, in constant homegrown methods of growth and development, lies our salvation.
Now, the time has come to separate the growth and development in the sectors of education, health, eradication of poverty, environment protection, human development, conservation of water resources and security of Pakistan, from the politics, forever. Politics and these issues of life and death can not go together.
In this regard, we can not put cart before the horse, which means that economic emancipation of the teeming millions and Pakistan’s financial stability, should be the top most priority, over all other subjects including the democracy, which can wait, after so much waste (over 70 years) of time and resources.
Even democracy can never deliver without its foundations truly embedded, in rock solid and inevitable local bodies system.
It is just a false propaganda of the beneficiaries of the democracy (oligarchs) that if allowed continuity, democracy can work and deliver from the assemblies and senate, without genuinely and financially autonomous grass roots level, fully empowered local bodies system; and not the sham local bodies system, currently prevalent in every province of Pakistan, very reluctantly allowed by the politicians, albeit, on the repeated orders of the Supreme Court.
If Pakistan has to be governed and developed with the current system of few provinces of huge areas having large populations, then it immediately needs a revamped and fully empowered local bodies or COUNTY system; else, we will have to convert every division, into a political and financial autonomous administrative units under the same name and boundaries of the current four provinces, so that no one can politically incite the people (for their own vested interest) in the name of division of a particular province. In this way the name of provinces will stay without any changes in its boundaries, but the current civil divisions can be converted into autonomous administrative units, working with full fiscal independence.
In the meantime, a referendum may also be held to decide about switching towards the presidential form of government.
Further, the biggest reason in the collapse of our economy has been the higher than the highest level of corruption which has created an impression and culture, which ensures that the crime of corruption pays and is an acceptable norm of our society; plus the judicial system which has miserably failed to genuinely punish the big wigs (even if they are found guilty by the court of law) who are caught on corruption or criminal charges of even day light murders, while providing such top level culprits so much facilities (even permission to travel abroad on humanitarian grounds) during trials and after conviction, like the facilities of house arrests and stay at five star hospitals (during the jail terms) that it motivates others, to always indulge in mega corruption and other major criminal activities with impunity.
The level of mega corruption, in fact, puts Pakistan at the top of the most corrupt nation’s league in the world, whose government level financial irregularities are almost double its size of the budget, as depicted from the news quoted below:
Quote.
“The Auditor General of Pakistan (AGP), Javaid Jahangir, has claimed that during the audit year 2017-18 auditors pointed out irregularities amounting to Rs8.276 trillion in the accounts of the federal government.
It may be mentioned that this figure is almost double the amount allocated for the fiscal year’s federal budget that is Rs4.75tr.”
Unquote.
Link:- https://www.dawn.com/news/1402111
We must re-vamp our judicial system to kill the notion that it always ultimately pays to indulge in mega corruption in Pakistan.
Until and unless, the culture of our country which loudly announces that crime of corruption pays in Pakistan, is not changed with radical steps of zero tolerance and no leniency, in (corruption cases) court trials and jail sentences; and severe punishments like DEATH SENTENCES are awarded in the corruption crimes, we will remain a Banana Republic of the worst category.
Under the circumstances, if certain basic changes in our political and judicial systems are not incorporated in our constitution, no dictator or even best of the best civilian leadership or political party, with all the good intentions, can deliver and succeed in pulling out this country, from the abyss.
It has been a good political tactics in the past by all and sundry, particularly by those at the helm of the affairs, to divert the attention of the masses, from the real issues, by mud slinging on politicians, civil and military servants, judges etc.
However, now we must put a full stop to this non-sense, which has wasted the entire 71 years life of Pakistan.
Nothing can match the benefits of the collective wisdom. Since, its a matter of impending economic collapse of the country, impetus for which is being provided by the numerous and rapid devaluations of the currency, since December 2017, which obviously is a sure recipe of disaster, for which all of us are responsible, in one way or the other: almost no one is exempt from the charge of hurting the cause of the country.
It looks that a certain gang of oligarchs within ourselves, is forcing Pakistan (by design) to irreversible bankruptcy disaster, as if, to punish Pakistan, for its some unpardonable crime.
As such, we should take each and every segment and political/social force of the society in confidence, for a very transparent scheme of our future development.
In this connection, Mr. Steve Maraboli has very appropriately said that “Make a pact with yourself today to not be defined by your past. Sometimes the greatest thing to come out of all your hard work isn’t what you get for it, but what you become for it. Shake things up today! Be You… Be Free… Share.”
Let us unitedly, build a new economically strong and politically stable Pakistan, with our collective and prudent decisions; knowing very well that no political party, group or institution is so strong, to run this country, single handedly, for a sustainable period, without the help and cooperation of each other.
Our urgent task must be to stem the economic rot immediately and on EMERGENCY basis.
Government of Pakistan (GoP) must be duly warned that rapid devaluation of the PKR is no panacea for the economic stability and amnesty schemes are factually and cruelly legalising crimes of the 1% rich at the expense of the 99% poor Pakistanis. Moreover, the latest amnesty scheme is so smartly designed that if we deposit 2% (Rupees 4 Crore) of say PKR 2 billion, we can even protect/legalise our FUTURE corruption of PKR 196 crore. Technically speaking the latest amnesty scheme can easily be used to whiten black money to be earned in future, as well.
Moreover, in Pakistan, we can easily control our expenses, if the following statement is adopted as a motto/mission; and implemented as an official policy, and is also displayed in the offices of the civil and military bureaucracy, just below the portrait of Quaid-e-Azam Muhammad Ali Jinnah Sahab:
“Recall the face of the poorest and the weakest man whom you may have seen and ask yourself if the step you contemplate is going to be of any use to him.”
In this regard, it is suggested that, we should AIM to bring Pakistan, to the level of Singapore of 2018, by the year 2040.
All politics and other considerations should be made subservient to this TARGET for 2040, even if we have to abolish weekly holidays for the next 20 years & reduce our daily sleeping time to 6 hours.
All stake holders, particularly, from the deprived sections of the society in Pakistan, must immediately come forward, for deciding about the direction of the future of the nation.
Biggest factor in any victory is self-confidence. Anti-thesis of terrorism is education, coupled with economic emancipation. But it must be remembered that no country or society has ever risen from ashes, without individual and collective sacrifices, hard work and discipline, for example Germany, Japan, China, Korea, Turkey and Malaysia. Basically these nations did not waste their time on feeding precious resources to top level democracy which automatically breeds oligarchy.
[Oligarchy is a form of power structure in which power rests with a small number of people. These people may be distinguished by nobility, wealth, family ties, education or corporate, religious or military control. Such states are often controlled by families who typically pass their influence from one generation to the next, but inheritance is not a necessary condition for the application of this term. Throughout history, oligarchies have often been tyrannical, relying on public obedience or oppression to exist. Aristotle pioneered the use of the term as a synonym for rule by the rich, for which another term commonly used today is plutocracy.
Link:- https://en.m.wikipedia.org/wiki/Oligarchy ].
The achievement of these countries named above were not the outcome of democracy at the top level, but participation of the entire population in the nation building at the grass roots level. These nations have risen (from the conditions worse than Pakistan) by the honesty of purpose of their leadership, national discipline, engagement of all segments of society from the grass roots level and rule of law. We very recently watched the example of rule of law from South Korea, where their former lady president was brought to court handcuffed, for a trial on corruption charges.
As such, our nation must embark upon the following agenda, to resurrect our economy, without any further loss of time.
1. We should not expect any different results at the end of the five term after the general elections of 2018 from what we got after the GE-2013. Why; because for any different result there has to be some change. In fact, famous scientist Albert Einstein defined INSANITY as doing the same thing over and over again, without any change and expecting different results.
Now since this country of 220 million population can not afford any further waste of time with so called democratic and dictatorship experiments, it will be prudent to look forward and immediately form a national government, which must be specifically government devoid of Hitmen of the lending agencies and controversial and dishonest people.
This homegrown government should consist of honest members from every segment of society for example labourers, peasants, teachers /professors, students, minorities, professionals from all possible fields and experts from the fields of media, law, military, diplomacy and civil administration.
2. This national government should request to all foreign donors for a 5 years moratorium, on all debt repayments by Pakistan, which is and has been a frontline state of the world’s war on terror (WOT). Here don’t forget that the world powers have totally written off loans of many countries, for much less cooperation than Pakistan, which is practically fighting their war for almost two decades; and Pakistan still NOT charging a penny for overflights in the ongoing war of terror being fought in Afghanistan.
3. 20% per annum reduction in all non-developmental government expenditures, plus total freeze in all perks paid from the national exchequer, involving foreign currency.
4. Maximum tax rate on each and every type of income in Pakistan should be fixed at 10%. This will not only bring huge revenues to the government by giving a fillip to the badly suppressed economy, but will also discourage (to a very large extent) the tax evasion tendencies.
5. Increase in productivity & exports with liberal tax and tariff relief to industry, commerce, trade and agriculture. In fact, our strong point is agriculture and our focus should be to revolutionise it with most modern technologies of smart agriculture, which easily has the potential to create five million jobs in just five years.
6. Set a target for 20% per annum increase in foreign remittances, by offering innovative incentives to expatriate Pakistanis.
7. Outsource the FBR (which will alone increase income by Rs.500 to Rs.1,000 billion) and IMPOSE FLAT 10% tax on ALL & EVERY TYPE OF INCOME (as already mentioned at 3. above), without any exemption or SRO’s (except for the Police and security forces personnel whose salaries may be doubled with expected receipt of un-precedented increase in revenues, due to the above suggestions). This will not only reduce income tax burden on salaried class (with maximum tax rate of 10%), but will also result in so much increase in revenues, to the extent that government will not require any tax imposition, in the budget. Plus, the government will be able to give tax free salaries to all the armed forces, rangers, police and other security agencies personnel, who are shedding their blood, in fighting the menace of terrorism, for our and our children’s safe TOMORROW.
8. The collective financial loss of State Enterprises is above Rs.500 billions per annum. All such entities should be immediately handed over to highly professional, dead honest, most patriotic successful Pakistani and or overseas businessmen, to head and bring in their own members of board of directors, to immediately turn around and successfully run these organisations, like world class companies, as a national cause service to the motherland, on war footings.
Few of the names which comes to mind of our world class successful Pakistani talented entrepreneurs, fully capable to serve the country in times of its dire need, are as below:
– Mr. Shahid Khan at USA, with net worth of $3.8 billion.
He owns Jacksonville Jaguars which worth $770 Million, plus a team in English Premier League ‘Fulham F.C’ which worth $300 Million and also He is the owner of Flex – N – Gate. He is the Richest person of Pakistan. He is presently living in USA. His main source of earnings are from the business of Auto parts manufacturing. He is counted as the 490th richest person in the world.
– Sir Anwar Pervaiz O.B.E
He is the founder and chairman of Bestway Group which is known as the country’s second largest cement producer and 16th largest cash and carry operator in UK, and also he is the Deputy Chairman of United Bank Limited Pakistan. He is one of the renowned investor. He is known as the great businessman in the country. His net worth is $1.5 Billion.
– Mr. Salim Ghauri is a renowned IT Entrepreneur recognised globally today. He is the founder & CEO of NetSol Technologies (1996).
– Mr. Razzaq Dawood is a highly reputed and successful industrialist and philanthropist. One of the founders of the famous LUMS university. He is founder of Descon.
– Mr. Sikandar Mustafa Khan is Chairman Millat group of companies and heads many organisations and forums. He is credited in the country for successfully heading buyout of a government run organisation which is a rare example in the industrial sector of the country in which employees of the same organisation purchased their company and created history of a terrific success story under the professional and administrative leadership of Mr. Sikandar M. Khan.
9. Pakistan’s Foreign policy is excellent in theory, perhaps the best in the world. However, this policy should be implemented in its true letter and spirit with core emphasis on PEACE particularly with its neighbours; and FP’s thrust and theme should be that any and every action must result in the economic benefit of the country.
10. Initiate steps (by imposing economic emergency) to bring each and every economic activity under document.
There is absolutely no doubt that by the dint of sheer hard work, sincerity & honesty, which is imbibed in the bones of the Pakistani work force, we can surely bring Pakistan, into the comity of 20 developed nations of the world, in the next 15-20 years.
The current leaders of Pakistan holding the destiny of this great nation, with highest manpower potential and material resources in the world, must remember the following two adages.
~ NOT FAILURE BUT SETTING LOW AIM IS A CRIME.
~ IN ORDER TO ACHIEVE THE IMPOSSIBLE IT IS PRECISELY THE UNTHINKABLE WHICH MUST BE THOUGHT.
A stern warning to Nawaz Sharif published by Pak Observer in 2013
A stern warning to PM in 2013..!
Mr. PM arrest economic downslide..!
Pakistan Observer 9 Sep 2013
Syed Nayyaruddin Ahmad Email:
nayyar51@hotmail.com
THERE is a strong feeling that government is mortgaging the future of the country with the foreign donor agencies, by taking so much huge amount of loans (that too just for the repayment of the old loans), which this poor country may never be able to repay. This means that in every terms, we have gone bankrupt; and can’t even breathe, without the debt life line.
The gravity of the loan repayment situation can be gauged that during the FY 2102-13 Pakistan spent about 1 trillion PKR out of the FBR’s revenue earnings of less than 2 trillion PKR. Today, Pakistan is not under huge debt, rather, it is completely buried under the debt. The government has borrowed Rs.611 billion in just 40 days from the state bank of Pakistan, as against Rs.507 billion in full year (2012-13). In other words, the PMLN’s government has borrowed Rs.15.3 billion per day in 40 days, as against Rs.1.4 billion per day by the previous regime in 2012-13.
The 6% depreciation of Rupee vs the USD in the last 80 days, has cost Pakistan Rs.3.5 billion per day and has added additional Rs.276 billion in public debt in the last 80 days. (Figures quoted in this para and its preceding para were reported by Dr. Ashfaque H Khan, in his article, titled “A nation’s debt” published by in a national English dated 27 August, 2013).
H’able Prime Minister Mian Nawaz Sharif Sahab, you always spoke against the debt burden through out the last 5 years tenure of the PPP. However, now your government has broken the entire 365 days record of the PPP government in just first 40 days, as per the details explained above. As such, kindly take it as very serious matter (of the economic life and death of Pakistan) because, all the world knows that the USSR, the strongest nuclear power of the world, was broken, not because of any enemy action, but by its own economic melt down.
Sir, unfortunately, all financial indicators points that your era is moving the country fast towards economic melt down. You may remember, I requested you to to take the personal charge of the affairs of the country, lest the situation may not come to a pass, where even you may not become helpless, to stem the rot.
In this regard, after declaring an economic emergency, the following economy and austerity measures are suggested for adoption, to at least put up an impression to the masses, that government is seriously contemplating to improve the economic resurgence of Pakistan. And also to dispel the impression that your economic policy is not to just blindly run the country on domestic and foreign loans and to merely pass your tenure of the government, without bothering about the repercussions of the future inability of the country, to pay back these loans.
Immediate 50% reduction of all the pay and perks of the entire government servants/employees from president to the peon. This should include all government employees, employees of the government semigovernment/autonomous corporations/ banks, PIA, Railways, Steel Mills etc. However, upon improvement of the economic situation the unpaid 50% salary amount should be gradually given back to the employees.
Moreover, for all these government employees, there should be a 50% rebate in payment of all utility bills and educational fees of their children during this period of economic emergency. 50% expenditure reduction in the entire PSDP. Absolute ban on the foreign trips of the government officials. All international meetings to be attended by the respective envoy’s of Pakistan, in that country.Absolute ban on the foreign medical treatment on government expenditure, right from the top to the bottom.
Cessation of the entire subsidy on the food items available to the Senators, MNA’s and MPA’s at the Parliament’s cafeteria, where Roti is served almost free; and even in Peshawar, it is selling at Rs.15/- for the general Public. Complete ban (in real sense) on the official entertainments at all levels.
NAB may be directed to take very immediate steps (absolutely ruthlessly) to recover (from within and outside Pakistan) all the looted national money, on a fast track basis. Immediate nationalisation (without giving any time to the ultra rich people to move their precious jewellery out of Pakistan) of the Gold, diamonds, gems and precious metal in Pakistan.
Reduce taxation rate of all types of taxes, GST, levies, excise etc. to a maximum of 10%. During the currency of this economic emergency period, there should be a ban on increase in the prices and rates of POL, utilities and all essential items.
Pakistani Magna Carta – How to come out of Straitjacket?
The degree of the sovereignty of a country, is directly proportional to the state of the economy of that nation.
However, even knowledgable people are not aware that the total debt (Internal + External) according to the central bank rose to Rs22.2 trillion or $222 billion in 2016-17 compared to Rs14.8 trillion or $148 billion of 2013.
The latest figure of the TOTAL debt stands at Rs25 trillion or $250 billion repeat, Dollar 250 billion.
Link..https://tribune.com.pk/story/1544770/2-ticking-economic-bomb/%20%5D/
Pakistanis are justified in demanding from the government to inform where this amount of $250 billion internal and external loans were spent, when, even the average entire national budget of the last ten years, was not more than worth $40 billion per year?
Just to have an idea of how much value can be derived from 250 billion USD given below is the cost comparisons of few projects in Pakistan and India:
Estimated/expected final cost of Orange Line Lahore Metro train (running distance just 27.1 KM’s) in 2018….2 billion USD (rough estimate).
Cost of Indian mission to Moon in 2008….Only 80 million USD
Cost of Indian mission to Mars in 2013….Only 73 million USD which had to travel about 8 billion KM’s.
We Pakistanis must know, that without any doubt, the easiest and surest way of moving ahead, is to stand on our own feet.
Foreign aid/loans, can keep us afloat, but won’t allow us to swim. Actually, in constant homegrown methods of growth and development, lies our salvation.
Now, the time has come to separate the growth and development in the sectors of education, health, eradication of poverty, environment protection, human development, conservation of water resources and security of Pakistan, from the politics, forever. Politics and these issues of life and death can not go together.
In this regard, we can not put cart before the horse, which means that economic emancipation of the teeming millions and Pakistan’s financial stability, should be the top most priority, over all other subjects including the democracy, which can wait after so much waste of time and resources.
Even democracy can never deliver without its foundations truly embedded, in rock solid and inevitable local bodies system.
It is just a false propaganda of the beneficiaries of the democracy (oligarchs) that if allowed continuity, democracy can work and deliver from the assemblies and senate, without genuinely and financially autonomous grass roots level, fully empowered local bodies system; and not the sham local bodies system, currently prevalent in every province of Pakistan, very reluctantly allowed by the politicians, albeit, on the repeated orders of the Supreme Court.
If Pakistan has to be governed and developed with the current system of few provinces of huge areas having large populations, then it immediately needs a revamped and fully empowered local bodies or COUNTY system; else, we will have to convert every division, into a province.
In the meantime, a referendum may also be held to decide should we switch towards the presidential system of government.
Further, the biggest reason in the collapse of our economy has been the higher than the highest level of corruption which has created an impression and culture, which ensures that the crime of corruption pays and is an acceptable norm of our society; plus the judicial system which has miserably failed to punish the big wigs who are caught on corruption or criminal charges of even day light murders, while providing such top level culprits so much facilities (even permission to travel abroad on humanitarian grounds) during trials; and facilities of house arrests and stay at five star hospitals (during the jail terms) that it motivates others, to always indulge in mega corruption and other criminal activities with impunity.
The level of mega corruption, in fact, puts Pakistan at the top of the most corrupt nation’s league in world, whose government level financial irregularities are almost double its size of the budget, as depicted from the news quoted below:
Quote.
“The Auditor General of Pakistan (AGP), Javaid Jahangir, has claimed that during the audit year 2017-18 auditors pointed out irregularities amounting to Rs8.276 trillion in the accounts of the federal government.
It may be mentioned that this figure is almost double the amount allocated for the fiscal year’s federal budget that is Rs4.75tr.”Unquote.
Link:- https://www.dawn.com/news/1402111
We must re-vamp our judicial system to kill the notion that it always pays to indulge in big corruption in Pakistan.
Until and unless, the culture of our country which loudly announces that crime of corruption pays in Pakistan, is not changed with radical steps of zero tolerance and no leniency, in corruption court trials and jail sentences; and severe punishments like DEATH SENTENCES are awarded in the corruption crimes, we will remain a Banana Republic of the worst level. Under the circumstances, if certain basic changes in our political and judicial systems are not incorporated in our constitution, no dictator or even best of the best civilian leadership or political party, with all the good intentions, can deliver and succeed in pulling out this country, from the abyss.
It has been a good political tactics in the past by all and sundry, particularly by those at the helm of the affairs, to divert the attention of the masses, from the real issues, by mud slinging on politicians, civil and military servants, judges etc.
However, now we must put a full stop to this non-sense, which has wasted the entire life of Pakistan.
Nothing can match the benefits of the collective wisdom. Since, its a matter of impending economic collapse of the country, impetus for which is being provided by the four devaluations of the currency in the last five months, which obviously is a sure recipe of disaster, for which almost all of us are responsible in one way or the other: almost no one is exempt from the charge of hurting the cause of the country. It looks that a certain gang of oligarchs within ourselves is forcing Pakistan (by design) to irreversible bankruptcy disaster, as if, to punish Pakistan, for its some unpardonable crime.
As such, we should decide to look forward and forgive and forget each other’s sins of the past, and take each and every segment and political/social force of the society in confidence, for a very transparent scheme of our future development.
In this connection, Mr. Steve Maraboli has very appropriately said that “Make a pact with yourself today to not be defined by your past. Sometimes the greatest thing to come out of all your hard work isn’t what you get for it, but what you become for it. Shake things up today! Be You… Be Free… Share.”
Let us unitedly build a new economically strong and politically stable Pakistan, with our collective and prudent decisions; knowing very well that no political party, group or institution is so strong, to run this country, single handedly, for a sustainable period, without the help and cooperation of each other.
Our immediate task must be to stem the economic rot immediately and on EMERGENCY basis.
Government of Pakistan (GoP) must be duly warned that rapid devaluation of the PKR is no panacea for the economic stability and amnesty schemes are factually and cruelly legalising crimes of the 1% rich at the expense of the 99% poor Pakistanis.
Moreover, in Pakistan, we can easily control our expenses, if the following statement is adopted as a motto/mission; and implemented as an official policy, and is also displayed in the offices of the civil and military bureaucracy, just below the portrait of Quaid-e-Azam Muhammad Ali Jinnah Sahab:
“Recall the face of the poorest and the weakest man whom you may have seen and ask yourself if the step you contemplate is going to be of any use to him.”
In this regard, it is suggested that, we should AIM to bring Pakistan, to the level of Singapore of 2018, by the year 2040.
All politics and other considerations should be made subservient to this TARGET for 2040, even if we have to abolish weekly holidays for the next 20 years & reduce our daily sleeping time to 6 hours.
All stake holders, particularly, from the deprived sections of the society in Pakistan, must immediately come forward, for deciding about the direction of the future of the nation.
Biggest factor in any victory is self-confidence. Anti-thesis of terrorism is education, coupled with economic emancipation. But it must be remembered that no country or society has ever risen from ashes, without individual and collective sacrifices and discipline, for example Japan, China, Korea, Turkey and Malaysia. Basically these nations did not waste their time on feeding precious resources to top level democracy which automatically breeds oligarchy. [Oligarchy is a form of power structure in which power rests with a small number of people. These people may be distinguished by nobility, wealth, family ties, education or corporate, religious or military control. Such states are often controlled by families who typically pass their influence from one generation to the next, but inheritance is not a necessary condition for the application of this term. Throughout history, oligarchies have often been tyrannical, relying on public obedience or oppression to exist. Aristotle pioneered the use of the term as a synonym for rule by the rich, for which another term commonly used today is plutocracy.
Link:- https://en.m.wikipedia.org/wiki/Oligarchy ]. The achievement of these countries named above were not the outcome of democracy at the top level, but participation of the entire population in the nation building at the grass roots level. These nations have risen (from the conditions worse than Pakistan) by the honesty of purpose of their leadership, national discipline, engagement of all segments of society from the grass roots level and rule of law. We very recently watched the example of rule of law from South Korea, where their former lady president was brought to court handcuffed, for a trial on corruption charges.
As such, our nation must embark upon the following agenda, to resurrect our economy, without any further loss of time.
1. We should not expect any different results at the end of the five term after the general elections of 2018 from what we got after the GE-2013. Why; because for any different result there has to be some change. In fact, famous scientist Albert Einstein defined INSANITY as doing the same thing over and over again, without any charge and expecting different results.
Now since this country of 220 million population can not afford any further waste of time with so called democratic and dictatorship experiments, it will be prudent to look forward and immediately form a national government, which must be specifically government devoid of Hitmen of the lending agencies and controversial and dishonest people.
This homegrown government should consist of honest members from every segment of society for example labourers, peasants, teachers /professors, students, minorities, professionals from all possible fields and experts from the fields of media, law, military, diplomacy and civil administration.
2. This national government should request to all foreign donors for a 5 years moratorium, on all debt repayments by Pakistan, which is a frontline state of the world’s war on terror (WOT). Here don’t forget that the world powers have totally written off loans of many countries, for much less cooperation than Pakistan, which is practically fighting their war for more than a decade; and Pakistan still NOT charging a penny for overflights in the ongoing war of terror being fought in Afghanistan.
3. 20% per annum reduction in all non-developmental government expenditures, plus total freeze in all perks paid from the national exchequer, involving foreign currency.
4. Maximum tax rate on each and every type of income in Pakistan should be fixed at 10%. This will not only bring huge revenues to the government by giving a fillip to the badly suppressed economy, but will also discourage (to a very large extent) the tax evasion tendencies.
5. Increase in productivity & exports with liberal tax and tariff relief to industry, commerce, trade and agriculture. In fact, our strong point is agriculture and our focus should be to revolutionise it with most modern technologies of smart agriculture, which easily has the potential to create five million jobs in just five years.
6. Set a target for 20% per annum increase in foreign remittances, by offering innovative incentives to expatriate Pakistanis.
7. Outsource the FBR (which will alone increase income by Rs.500 to Rs.1,000 billion) and IMPOSE FLAT 10% tax on ALL & EVERY TYPE OF INCOME (as already mentioned at 3. above), without any exemption or SRO’s (except for the Police and security forces personnel whose salaries may be doubled with expected receipt of un-precedented increase in revenues, due to the above suggestions). This will not only reduce income tax burden on salaried class (with maximum tax rate of 10%), but will also result in so much increase in revenues, to the extent that government will not require any tax imposition, in the budget. Plus, the government will be able to give tax free salaries to all the armed forces, rangers, police and other security agencies personnel, who are shedding their blood, in fighting the menace of terrorism, for our and our children’s safe TOMORROW.
8. The collective financial loss of State Enterprises is above Rs.500 billions per annum. All such entities should be immediately handed over to highly professional, dead honest, most patriotic successful Pakistani and or overseas businessmen, to head and bring in their own members of board of directors, to immediately turn around and successfully run these organisations, like world class companies, as a national cause service to the motherland, on war footings.
Few of the names which comes to mind of our world class successful Pakistani talented entrepreneurs, fully capable to serve the country in times of its dire need, are as below:
– Mr. Shahid Khan at USA, with net worth of $3.8 billion.
He owns Jacksonville Jaguars which worth $770 Million, plus a team in English Premier League ‘Fulham F.C’ which worth $300 Million and also He is the owner of Flex – N – Gate. He is the Richest person of Pakistan. He is presently living in USA. His main source of earnings are from the business of Auto parts manufacturing. He is counted as the 490th richest person in the world.
– Sir Anwar Pervaiz O.B.E
He is the founder and chairman of Bestway Group which is known as the country’s second largest cement producer and 16th largest cash and carry operator in UK, and also he is the Deputy Chairman of United Bank Limited Pakistan. He is one of the renowned investor. He is known as the great businessman in the country. His net worth is $1.5 Billion.
– Mr. Salim Ghauri is a renowned IT Entrepreneur recognised globally today. He is the founder & CEO of NetSol Technologies (1996).
– Mr. Razzaq Dawood is a highly reputed and successful industrialist and philanthropist. One of the founders of the famous LUMS university. He is founder of Descon.
– Mr. Sikandar Mustafa Khan is Chairman Millat group of companies and heads many organisations and forums. He is credited in the country for successfully heading buyout of a government run organisation which is a rare example in the industrial sector of the country in which employees of the same organisation purchased their company and created history of a terrific success story under the professional and administrative leadership of Mr. Sikandar M. Khan.
9. Pakistan’s Foreign policy is excellent in theory, perhaps the best in the world. However, this policy should be implemented in its true letter and spirit with core emphasis on PEACE particularly with its neighbours; and FP’s thrust and theme should be that any and every action must result in the economic benefit of the country.
10. Initiate steps (by imposing economic emergency) to bring each and every economic activity under document.
There is absolutely no doubt that by the dint of sheer hard work, sincerity & honesty, which is imbibed in the bones of the Pakistani work force, we can surely bring Pakistan, into the comity of 20 developed nations of the world, in the next 15-20 years.
The current leaders of Pakistan holding the destiny of this great nation, with highest manpower potential and material resources in the world, must remember the following two adages.
~ NOT FAILURE BUT SETTING LOW AIM IS A CRIME.
~ IN ORDER TO ACHIEVE THE IMPOSSIBLE IT IS PRECISELY THE UNTHINKABLE WHICH MUST BE THOUGHT.
Devaluation is a sure recipe of economic meltdown..!
Devaluation is a sure recipe of economic meltdown..!
Government of Pakistan (GoP) must be duly warned that rapid devaluation of the PKR is no panacea for the economic stability.
Rather, it is a sure recipe for disaster, which, as a direct side affect, is throwing back more and more Pakistani population, to below the poverty line.
Those economic managers of the country, who think that our economic slide into the abyss, can be controlled with more and more devaluation (in fact four times in the last five months, re-defining or re-phrasing the definition of the total public debt, changing the definition of poverty to people who live on 2$ per day income to 1$ per day income and by fudging the economic numbers: are behaving like a pigeon; which closes its eyes, on seeing a cat.
I have been writing in the past that it’s a misnomer and disinformation that Pakistanis don’t pay taxes.
The fact is that all the 220 million Pakistanis pay taxes.
The devil lies in the fact that above 80% indirect taxes and less than 20% direct taxation, is the major cause of our backwardness; and on two dollar per day income basis, is the main reason, of over 130 million population, living below the poverty line.
Moreover, 10% poorest pay 17% of the tax revenue to the government; and richest 10% pay only 10% of the revenue to the government.
Until and unless, these abnormalities of our economic system are corrected, it will be well neigh impossible, to take out major portion of our population (which numbers may well have now increased substantially over 130 million after the recent massive devaluations of PKR) from the below poverty line income segment of poor people, earning less than two dollars per day.
In this regard, the fastest way to reduce the poverty, is to ensure direct foreign investment into Pakistan, for which our foreign missions must be given specific targets.
Other means includes immediately replacing the entire existing economic team of the SBP and the MoF. And by bringing back the billions of dollars illegal foreign funds and properties of Pakistanis, a la the Saudi Arabian Model and recovery of illegally written off loans and bad debts, by imposing economic emergency laws, on fast track basis.
Last but not the least, immediate launching of a scheme for payment of 3% PA profit (payable bi-annually) on Foreign Currency bank deposits in Pakistan (backed by the sovereign guarantee of the GoP) with a suitable, but attractive fixed period. This is a fool proof scheme, sans any risk, which can boost up our foreign reserves, in a very short time, on extremely cheap rates, as compared to the foreign loans and international bonds, which were sold by the previous government of PMLN, at even 8.25% interest rates (Pakistan will be repaying USD 910 million for USD 500 million Euro Bonds) for which the ten PM Mian Nawaz Sharif was requested to hold an inquiry, to fix the responsibility of the culprit(s), who allowed the sale of Euro Bonds, on such a criminally high interest rates.
Syed Nayyar Uddin Ahmad
Sydney
Alarm bells ringing for the GoP – Red lines of the economic crisis have been crossed
Government of Pakistan (GoP) must be severely warned that rapid devaluation of the PKR is no panacea for the economic stability. Rather, it is a sure recipe for disaster, which, as a direct side affect, is throwing back more and more Pakistani population, to below the poverty line.
Those economic managers of the country, who think that our economic slide into the abyss, can be controlled with devaluation, re-defining the total public debt, changing the definition of poverty to people who live on 2$ per day income to 1$ per day income and by fudging the economic numbers, are behaving like a pigeon; which closes its eyes, on seeing a cat.
I have been writing in the past that it’s a misnomer and disinformation that Pakistanis don’t pay taxes.
The fact is that all the 220 million Pakistanis pay taxes.
The devil lies in the fact that above 80% indirect taxes and less than 20% direct taxation, is the major cause of our backwardness; and on two dollar per day income basis, is the main reason, of over 130 million population, living below the poverty line.
Moreover, 10% poorest pay 17% of the tax revenue to the government; and richest 10% pay only 10% of the revenue to the government.
Until and unless, these abnormalities of our economic system are corrected, it will be well neigh impossible, to take out major portion of our population (which numbers may well have now increased substantially over 130 million after the recent massive devaluation of PKR) from the below poverty line income segment of population, earning less than two dollars per day.
In this regard, the fastest way to reduce poverty, is to ensure direct foreign investment into Pakistan, for which our foreign missions must be given specific targets.
Other means includes immediate sacking of the entire existing economic team of the SBP and the MoF. And by bringing back the billions of dollars illegal foreign funds and properties of Pakistanis, a la the Saudi Arabian Model and recovery of illegally written off loans and bad debts, by imposing economic emergency laws, on fast track basis.
Last but not the least, immediate launching of a scheme for payment of 3% PA profit (payable bi-annually) on Foreign Currency bank deposits in Pakistan (backed by the sovereign guarantee of the GoP) with a suitable, but attractive fixed period. This is a fool proof scheme, sans any risk, which can boost up our foreign reserves, in very short time, on extremely cheap rates as compared to foreign loans and international bonds, which were sold by the previous government of PMLN, at even 8.25% rates, for which I had then requested to Mian Nawaz Sharif, to hold an inquiry, to fix the responsibility of the culprit(s), who allowed the sale of Euro Bonds, on such a criminally high interest rates.
Syed Nayyar Uddin Ahmad
Sydney
Pakistan’s enemy # 1 is neither India nor terrorism..!
Suggestions for improving economy with non-traditional ways..!
PAKISTAN has accumulated expensive loans, a huge trade gap and a big current account deficit, declining remittances and state-owned enterprises are incurring losses of over $ 5 billion per annum. There is massive corruption in society, so much so that the size of the black economy has overtaken the country’s annual budget, money laundering is in excess of $10 billion annually; and a steeply depreciating rupee.
This is a sure recipe for disaster. Thus a radical change is the need of the hour.
Our political parties have shown no resolve to address the issues afflicting the country. It seems they neither have the capacity nor the will to deliver.
Perhaps, the system was never designed to serve the people. In view of the foregoing, it is the most appropriate time for a surgical corrective action.
We need a consensus government of young, qualified and honest people, who are less than 45 years of age at the Centre and the provinces to achieve the following six tasks in short and medium-term period.
1) Reviving the economy of Pakistan.
2) Draft a new social contract for every sector with special focus on the have-nots.
3) Devise a governance plan, which should be free from the blackmailing of the mafias, lobbies and the pressure groups.
4) Further enhance the scope of CPEC projects.
5) Develop mechanism to stop corruption and money laundering.
6) Plan up a robust strategy to bring back the wealth stashed abroad by Pakistanis.
To ensure that the country stays on the right track, every economic activity must be documented while taxes and duties should be reduced to bare minimum not exceeding 10% in any case.
I am in sixties, and have no qualms in admitting that our generation has failed Pakistan. Now it is high time, we must hand over the mantle to those who are qualified, energetic, capable and less than 45 years old.
Syed Nayyar Uddin Ahmad
Dawn 24 October 2017
Post Script:
The cardinal rule to build a sustainable economy is to live within the means; for which austerity is the secret of success.
In Pakistan, we can easily control our expenses, if the following statement is adopted as a motto/mission; and implemented as an official policy, and is also displayed in the offices of the civil and military bureaucracy, just below the portrait of Quaid-e-Azam Muhammad Ali Jinnah Sahab:
“Recall the face of the poorest and the weakest man whom you may have seen and ask yourself if the step you contemplate is going to be of any use to him.”
